2 Imperative Land Acquisition Tools (CFFL 350)
2 Imperative Land Acquisition Tools
Jack Butala: 2 Imperative Land Acquisition Tools. Leave us your feedback for this podcast on iTunes and get the free ebook at landacademy.com, you don’t even have to read it. Thanks for listening.
Jack Butala: Jack Butala with Jill DeWitt.
Jill DeWit: Happy Friday.
Jack Butala: Welcome to our show today. In this episode, Jill and I talk about two imperative land acquisition tools. Things you can’t live without. Before we get into it, let’s take a question posted by one of our members on the landacademy.com community, online community, it’s free.
Jill DeWit: Okay. Marcus asked, “I’m considering buying my first property with back taxes/a tax lien. The tax lien is for a $1000.00. How does this typically work? Do I buy it, and pay the taxes off, and then sell it? I’m remembering some people on this group saying that you can sell it without paying that off.” I said it right.
Jack Butala: Well, that’s true.
Jill DeWit: Right.
Jack Butala: With tax liens it’s slightly more complicated, so there’s a couple things that can happen. If you’re looking at a property, it’s got back taxes associated with it, it’s either got, you know, a couple years worth, and then you just go in and pay it, and it’s over. If you want to. If it’s pretty far back, and it’s a tax lien state, it’s got a lien associated with it, so there’s going to be somebody … You’re going to have to pay a little bit more. That’s the only difference.
You still write a check, and it still goes to the same department, usually, but it’s going to be for just slightly more.
Jill DeWit: Because somebody bought the tax lien on the property, is what you’re talking about?
Jack Butala: Yeah. Yeah, and that’s way beyond the scope of this whole thing, but that’s all it is. Don’t be afraid. It still goes away when you pay it. Write the check.
Jill DeWit: Now, this is my … I want to make a point that, it doesn’t mean that every time you buy a property, and there are some taxes still due on it that this is the situation, because it’s a little bit different. Just a property that’s three years behind on their taxes, may not be in the liens situation.
Jack Butala: That’s right.
Jill DeWit: It may not have been sold to somebody else.
Jack Butala: That’s right.
Jill DeWit: You know, they bought the lien, and all that good stuff. It’s just like, “Hey, they … It’s overdue for three years.”
Jack Butala: Yep.
Jill DeWit: “Someone needs to catch us up at some point.” Then, in that situation, you don’t have to do it at that time. You can sell it with that. You always want to disclose it, and let the next person know-
Jack Butala: That’s the last part of the question.
Jill DeWit: -you know, what’s coming along. Yeah, you don’t have to do it, and just let the next person know.
Jack Butala: A tax lien that starts the clock pretty severely ticking. There’s a small chance that, and I want you to be real careful here Marcus, that the week or so that it takes you, from the time that you decide to buy this property, to actually get it recorded in your name, depending on how you do it, there’s a chance that that actually could be the week where it’s over. Where the property gets lost, and you could lose the money. What you want to do is really call either the Treasurer or the Recorder, whoever is managing the tax liens for that county, and have a real candid conversation. “I’m buying the property. I’m doing it this week. As soon as it’s in my name, I’m planning to write a check to write the tax lien off, is does that work within the time frame of this, or do you guys actually having a lien sale, right now? Where it’s going to actually, I could lose the property, lose all the money.”
That’s the only … Is it … The chance of that happening are so slim, it’s still worth a call.
Jill DeWit: Right.
Jack Butala: Must be a good deal; $1,000 in back taxes.
Jill DeWit: Mm-hmm (affirmative). It’s good. Love it.
Jack Butala: If you have a question, or you want to be on the show, reach out to either one of us on landacademy.com. Today’s show, this is the meat of the show. Today’s topic, I mean, is two imperative land acquisition tools. Jill and I intentionally, I wrote this title, and I intentionally did not tell her what I think the two tools are, and she did not tell me what hers are. I can’t wait. You go first.
Jill DeWit: I thought, kind of big picture. I took this as, “I’m working on acquisitions, what are two things I cannot live without, and I’m new to this.” Number one-
Jack Butala: Or not.
Jill DeWit: Or not, either way. Well, see I already think, there’s one that we’re going to have the same, and one we’re going to have different, I think. The two things I couldn’t live without as I’m doing this business, is a) knowing what I’m doing.
Jack Butala: Oh, education.
Jill DeWit: I look at education as a tool. I look at data as a tool. Here’s why, what things to me are no big deal, that I can work out, are money, my website, my LLC, my office, my bank setup, my staff, you know what I mean?
Jack Butala: Yeah, those are not necessary at all.
Jill DeWit: These are the things that people get hung up on though.
Jack Butala: I know. You’re right.
Jill DeWit: Those are things are not a big deal. Even selling and all that good stuff. I don’t have to think about any of that. Just acquisition data knowledge. What are you’re two?
Jack Butala: Data and a bulk mail printer.
Jill DeWit: I thought that’s what you’re going to say.
Jack Butala: Data, and here, let me … I’ll give you a great example. Jill and I, obviously, professionally, and personally know a lot of people in the real estate business, and a lot of extremely successful house-flippers, house builders, house developers. None of them, I cannot name one, not one person, who we know, outside of the Land Academy group that understands that data is how you make a decision. They all have established whatever transaction deal flow that they need to buy and sell real estate, all types.
They’ve all established it, and it always, it all works, but they could be doing it so much better, so much cheaper, and faster, and easier. They just don’t, they’re not interested.
Jill DeWit: Exactly.
Jack Butala: Data is imperative and not just land acquisitions, but any type of real estate acquisition. You got to go about it that way. It’s hard to do, because people are, you know, people that flip houses are, maybe they’re good contractors. They get like a handful of broker’s freedom deals, and they pay top dollar.
Jill DeWit: I think they’re used to getting up every morning, and surfing the MLS, and see what got posted the night before.
Jack Butala: Or taking calls from brokers.
Jill DeWit: They think they’re going to grab it. Right. They’re putting all their feelers out there, and signs on the corner.
Jack Butala: Silliest thing ever.
Jill DeWit: They’re driving around.
Jack Butala: Yeah.
Jill DeWit: That’s just, I think it’s just out of habit that they think it’s how it’s supposed to go.
Jack Butala: Jill and I, in a couple cases, have converted, we just feed them the deals that they want.
Jill DeWit: Converted them.
Jack Butala: We converted them.
Jill DeWit: Like it’s a religion.
Jack Butala: In both cases, I’m like, “Why don’t you guys just get some data, and go this.” What? Get data.
Jill DeWit: Join the church.
Jack Butala: You know what?
Jill DeWit: Join the data church, it’s easier.
Jack Butala: Data church, oh my God. I’m writing that down.
Jill DeWit: I’m serious.
Jack Butala: That’s a show right there.
Jill DeWit: I converted them. Here, drink this. I’ve had … People do say that all the time, “I’m about to drink the land Kool-aid.” I’m like, “It’s good.” No. It’s like-
Jack Butala: That’s hilarious.
Jill DeWit: -it’s just, for you and I, it’s just the, get out of 1980.
Jack Butala: Yeah.
Jill DeWit: You know, that’s it. It’s not 1985.
Jack Butala: That’s tool number one, is data, and learn how to use it. Jill’s education piece is correct. You can get good data, and use it all wrong. It’s not likely if you’re working with us, but anyway. Data, and then bulk mail printing, getting the correct … You could have the best data in the planet, if you’re not … If you’re liking a stamp, with the best data on the planet, you’re still, it’s just a mess. It’s going to be a mess. You’re not going to get the results that you want.
Jill DeWit: Yeah, having that professional printer, like you talked about, Jack, and they that they know how to scrub the addresses, and word it right, and make sure it gets to the … You want, because if the offers are getting hand written and they’re not getting to right owner, that’s now the right way to do it too.
Jack Butala: Every minute that you spend with a non-professional bulk mail printer, or licking a stamp, and buying envelopes, every single minute you spend could be spent talking to owners. There’s a million different things. You could learn how to scrub data better.
Jill DeWit: Right.
Jack Butala: There’s a lot of different ways, and better ways to spend your time.
Jill DeWit: Have your website just rocking, where everybody can just check out easily. Have your postings all over the planet, really.
Jack Butala: Right.
Jill DeWit: Your system set up for that.
Jack Butala: The whole point to all of this stuff, is to make it easier, to make it, to free time up, to not do silly stuff, and do the stuff that matters, which is talking to buyers and sellers; it’s being a deal maker.
Jill DeWit: One thing to think about too, is you don’t have to be at the top, top, top level. That’s one thing about you and I, Jack, is that who we work with is not all professionals.
Jack Butala: Oh, gosh.
Jill DeWit: We work with plenty of people who this is new to them, mom-and-pop kind of scenarios, who are successful because we’re helping them come into the side door, and have access to all of our stuff. You get all the professional everything. That’s what you want. You want to be using all the right tools. You don’t have to graduate to get to do that.
Jack Butala: Right. Let’s take a look at one of these two people that we regularly sell houses to, that refuse to be converted, as Jill puts it. Let’s look at the anatomy of one deal, and how much money they save, or waste, or what. Let’s say, they peruse … This guy peruses the MLS, and he buys a property for $120,000, a house. He puts $80,000 in, and so now he’s $200,000 into this thing. His target price is, sell price is $250,000. He does a deal. Let’s forget about real estate fees and all kinds of other stuff, and he makes $50,000. Right?
Purchase is for $120,000, spends $80,000 cleaning it up, he’s in for $200,000, sells it for $250,000. What if he sent that’s own mail out, and purchased that same asset that he bought for $120,000 on the MLS, for $80,000?
Jill DeWit: Right.
Jack Butala: That’s $40,000. Then do the exact same thing with, the same numbers. That’s $40,000 more, in stead of making $50,000, he’s going to make $90,000. For doing the exact same thing.
Jill DeWit: Exactly.
Jack Butala: To buy the asset himself, maybe takes, to send mail out, unless you know what you’re doing, I don’t know, a couple hours on Sunday.
Jill DeWit: Right.
Jack Butala: If you do 10 deals like that. Ten deals a year, these guys do way more than that. If they do 10 deals like that, that’s half a million dollars more that they made, for spending a couple hours on Sunday.
Jill DeWit: Well, know what else, too? One good quality mailer, he’s probably got one deal he’s going right now, and three more lined up to go right after it. He’s now got six months of work ready to go, off one mailer if he wants.
Jack Butala: That’s it. It’s just so compelling, and overwhelming the argument to have a good … These two tools are imperative.
Jill DeWit: Right.
Jack Butala: Congratulations, you’re great at flipping houses. There’s a lot of people out there that are. Why not just, you know, instead of getting a new cabinet guy, maybe get a new data guy.
Jill DeWit: Instead of squeezing that guy for an extra grand, yeah, buy the asset a little better, and easier.
Jack Butala: Maybe spend the money on putting better finishes in, that turn out a better purchase price. On and on, and I mean, it’s just so-
Jill DeWit: That’s a good point.
Jack Butala: -they’re so compelling.
Jill DeWit: Don’t squeeze your contractor, give your contractor more money, because you can afford to make it even better. I like that too.
Jack Butala: Right.
Jill DeWit: Through in, whatever. I love it. Spend the money on staging it, now. You can afford to do that. Whatever.
Jack Butala: We have members, who, … One member specifically, who, that’s what she does. She becomes a sub-contractor for home flippers, and feeds them deals, and gets paid right out of escrow. She never puts a dollar in. Jill and I do some version of that, too. We have a program coming out like that, next year, in 2017, but it just, it’s so hard to say the same story and say it differently, and use different examples, and still have everybody say, “What are you talking about, man?”
Jill DeWit: I know. We’re two people at a time, trying to change the way the universe sees deals.
Jack Butala: I thought you were going to say the two imperative land acquisition tools are Jack and Jill.
Jill DeWit: Oh, awww.
Jack Butala: That’s what I honestly thought you were going to say.
Jill DeWit: That’s it. Why didn’t I think of that?
Jack Butala: Because it’s stupid.
Jill DeWit: Oh my gosh.
Jack Butala: That’s why you didn’t think of it.
Jill DeWit: There’s our blog. Two imperative land acquisition tools, hint, they’re not Jack and Jill.
Jack Butala: I should have titled it that way. That would have, should have been the title of this show.
Jill DeWit: That’s awesome, oh, it’s so good. That’s fantastic.
Jack Butala: I, serious-
Jill DeWit: I seriously got to write that down.
Jack Butala: On the education piece of this, you know, some people hear the word education, and go like, “I stopped doing that in 12th grade,” or in some cases 10th grade. If that’s the case, and you’re actually really good at real estate investing and flipping, but you’re not using data and mail, hire somebody like us. Sub it out.
Jill DeWit: Right.
Jack Butala: You don’t have to learn.
Jill DeWit: No.
Jack Butala: It’s not hard. Actually, reach out to us, we’ll point you … They have members all over the country, we’ll find one of our existing members and hook you guys up.
Jill DeWit: Exactly. It’s not crazy.
Jack Butala: Join us in another episode, where Jack and Jill-
Jill DeWit: Your two favorite acquisition tools.
Jack Butala: Two tools. I totally just called you a tool.
Jill DeWit: I know. I just hit the microphone with my hands, I was slapping so hard, I’m just hitting my equipment all over the room here, it’s great. Two tools.
Jack Butala: -where we discuss how to use information, that’s me.
Jill DeWit: And inspiration, that’s me, to keep everything on track.
Jack Butala: To get all the tools in the toolbox that you want.
Jill DeWit: We use them everyday, to buy property for half of what it’s worth, and sell it immediately.
Jack Butala: You’re not alone, in your tool-ness. What the heck, man.
Jill DeWit: Oh my gosh.
Jack Butala: Crack me up.
Jill DeWit: Hey, thank you for not bringing up Tim, the tool man, Taylor. You did not bring up any Tool Time stuff. I was waiting for that.
Jack Butala: Oh, my gosh. No one, everybody’s not 80.
Jill DeWit: Thank you. I love it. That was good. Good show, good Friday.
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